Campaigner Prisca Furlong, who attended the meeting, submitted a formal complaint to the Monitoring Officer following the Town Council’s planning committee meeting on August 23.
Town councillors had voted 8-6 in support of an application to build the four new homes on the site, which is owned by the King Edward VI School Trust.
Coun Margaret Ottaway, who is a trustee for the KEVIS Trust having been nominated by Louth Town Council itself, was one of those who voted to support the development - which Ms Furlong considered to be a conflict of interest.
Coun Ottaway later told the Leader: “The things I do are done in good faith, for the benefit of the school. I was not speaking on behalf of the charity”. She added that the Trust has closely followed The Charity Commission’s rules.
Following a review of the situation, ELDC’s Deputy Monitoring Officer Alison Penn confirmed that the Town Council will be re-consulted on the matter, and that Coun Ottaway will not vote.
Ms Penn said: “The way in which (Coun Ottaway’s) involvement in discussions could be seen as a conflict of interest and a decision in which she should not have taken part.”
The letter added that Coun Ottaway “has expressed regret for not having appreciated that a conflict may have existed”.
Coun Ottaway confirmed to the Leader that she will declare an interest and not speak or vote on the matter when the Town Council is re-consulted on the application.